Apple Faces First Italian DMA Probe on iCloud Interoperability

[MilaM]

I mean, it took a lot of perfectly legal business practices and made them illegal only for certain companies (which is insane if you stop to think about it). Seems pretty retroactive and targeted to me.

Abusing market dominance is not perfectly legal. If the Gatekeepers are not abusing it, some might win their cases in court.

 

[surferfb]

Abusing market dominance is not perfectly legal. If the Gatekeepers are not abusing it, some might win their cases in court.

How is it abuse if it’s fine when others do it? And how is it market dominance when a company doesn’t meet the EU’s 40% market share threshold to have market dominance?

 

[MilaM]

How is it abuse if it’s fine when others do it? And how is it market dominance when a company doesn’t meet the EU’s 40% market share threshold to have market dominance?

The 40 percent threshold is not a necessary condition, just indicative. Other factors need to also be taken into account.

We are also not talking about the smartphone market as such. The market under investigation is for digital goods sold when using the mobile platforms. If the market is defined as services sold on each platform, then both Apple and Google have 100% market share 😉.

 

[surferfb]

The 40 percent threshold is not a necessary condition, just indicative. Other factors need to also be taken into account.

We are also not talking about the smartphone market as such. The market under investigation is for digital goods sold when using the mobile platforms. If the market is defined as services sold on each platform, then both Apple and Google have 100% market share 😉.

1) It’s not digital goods sold. Just digital
Goods sold by Apple or Google. Not Samsung, not Amazon, not Sony, not Nintendo, etc.
2) “Services sold on each platform” is as stupid a metric as saying McDonalds has a 100% marketshare on hamburgers inside McDonalds restaurants

 

[MilaM]

2) “Services sold on each platform” is as stupid a metric as saying McDonalds has a 100% marketshare on hamburgers inside McDonalds restaurants

Can McDonalds prevent other restaurants to sell burgers or fries?

 

[surferfb]

Can McDonalds prevent other restaurants to sell burgers or fries?

McDonalds can certainly prevent other restaurants from using their property to sell burgers or fries.

Can Apple prevent developers from selling apps on Android? Or the web? Or Windows? Or Nintendo? Or Linux? Or PlayStation? Or Steam? Or Xbox? Or the Galaxy Store? Or Amazon? Etc. etc. etc.

 

[MilaM]

McDonalds can certainly prevent other restaurants from using their property to sell burgers or fries.

Can Apple prevent developers from selling apps on Android? Or the web? Or Windows? Or Nintendo? Or Linux? Or PlayStation? Or Steam? Or Xbox? Or the Galaxy Store? Or Amazon? Etc. etc. etc.

I was talking about the burger market in an abstract way. Of course McDonalds does not have to allow competitors using their stores to sell goods. My point is that the consumer are not obligated by contractual terms to only buy burgers at McDonalds. Other restaurants can open shops in the vicinity of every McDonalds and compete on quality and price. This is not the case for many digital goods anymore, and it's bad for the customer and the whole ecosystem.

You seem to value private property over everything else. The European approach to competition is quite different. Some business practices that are the result of market dominance are regarded as bad for the consumer and for innovation. The American way is to let few companies grow very large and create quasi monopolies. It's off course debatable which philosophy has better outcomes. Shareholder seem to like American capitalism more, because it leads to higher margins for businesses. Europeans prefer more intervention which puts a downward pressure on prices and comes with more veriety and therefore choices.

 

[surferfb]

I was talking about the burger market in an abstract way. Of course McDonalds does not have to allow competitors using their stores to sell goods. My point is that the consumer are not obligated by contractual terms to only buy burgers at McDonalds. Other restaurants can open shops in the vicinity of every McDonalds and compete on quality and price. This is not the case for many digital goods anymore, and it's bad for the customer and the whole ecosystem.

I disagree wholeheartedly that “this is not the case” for many digital goods. Just because the competition happens before customers buy a phone, doesn’t mean the competition doesn’t happen and isn’t fierce. If you always go to the same restaurant then sure that restaurant has a monopoly on your food choices when you eat out. But it’s not like you were forced to pick that restaurant - you picked it because you like it. If you stop liking it you can go to one of the others in town.

I’d also strongly disagree that Apple’s model is bad for the customer or ecosystem. In fact, I think Apple’s model is far superior for the average customer. Both from ease of use and security/privacy perspectives. Especially because, as we’ve seen on Android, the alternate model doesn’t lower prices for consumers and isn’t actually wanted by consumers.

You seem to value private property over everything else. The European approach to competition is quite different. Some business practices that are the result of market dominance are regarded as bad for the consumer and for innovation. The American way is to let few companies grow very large and create quasi monopolies. It's off course debatable which philosophy has better outcomes. Shareholder seem to like American capitalism more, because it leads to higher margins for businesses. Europeans prefer more intervention which puts a downward pressure on prices and comes with more veriety and therefore choices.

Don’t really disagree with what you say here, other to add that I’d argue the EU model also puts downward pressure on innovation and ironically limits real choice in favor of choices that are akin to “coke vs pepsi vs rc cola” - three “different” options that, at the end of the day, are really the same thing.

 

[MilaM]

If you always go to the same restaurant then sure that restaurant has a monopoly on your food choices when you eat out. But it’s not like you were forced to pick that restaurant - you picked it because you like it. If you stop liking it you can go to one of the others in town.

Now imagine that there are only two restaurant chains in the whole world and both of them have very similar menus and prices. On top of that no other restaurant will enter the market because the barriers to entry are insurmountable. Is this a healthy situation for the customers and suppliers of those restaurants? Maybe this is what American consumers are used to in many parts of the country and sectors, I don't know.

We are already in a Pepsi vs. Cola situation with iOS and Android. It's mostly a matter of taste which platform you choose. The question the DMA is trying to address is if Pepsi or Coke should be allowed to dictate what other meal items we choose to eat with our Cola.

Your point about innovation is possibly worth considering. But then again, is there such a big difference between owning an iPhone and a Pixel? From the perspective of the average consumer both options do all the same things. Even the UI has converged so much, that an iOS user would have no big problem adjusting to Android. Yes, privacy is (still) better on iOS. But I also don't see how the law is taking away options for consumers in this regard. Apple still can use it as a point of differentiation if they want to.

 

[surferfb]

Now imagine that there are only two restaurant chains in the whole world and both of them have very similar menus and prices. On top of that no other restaurant will enter the market because the barriers to entry are insurmountable. Is this a healthy situation for the customers and suppliers of those restaurants? Maybe this is what American consumers are used to in many parts of the country and sectors, I don't know.

Imagine two food halls that host independent chefs inside their walls, and let you walk to the competitor next door for free. One lets anyone who wants to cook and sell food, the other won’t let chefs sell food unless the food hall is able to ensure basic food safety and hygiene standards are followed.

Is regulating their chef selection and food safety standards to be identical good for diners? Particularly when the one forced to change is food hall whose customers get food poisoning significantly less frequently! Is the solution that is best for customers really “make the safer restaurant follow the food safety and chef screening practices of the less safe one”?

I’ll give you that it’s “better for the chefs” but I’d argue it’s much worse for the customers.

We are already in a Pepsi vs. Cola situation with iOS and Android. It's mostly a matter of taste which platform you choose. The question the DMA is trying to address is if Pepsi or Coke should be allowed to dictate what other meal items we choose to eat with our Cola.

No, the DMA is saying Coke has to follow Pepsi’s bottling and ingredient procurement process, even though we know Pepsi’s drinkers get food poisoning more often than Coke drinkers, because it’s not fair to the ingredient suppliers and bottlers that they don’t have access to Coke drinkers - even though Coke advertises “we follow stringent safety standards” as a key differentiation from Pepsi.

Your point about innovation is possibly worth considering. But then again, is there such a big difference between owning an iPhone and a Pixel? From the perspective of the average consumer both options do all the same things. Even the UI has converged so much, that an iOS user would have no big problem adjusting to Android.

They look the same, sure, but under the hood they operate differently - namely one is a closed ecosystem with the platform owner maintaining tight control to protect users from security issues - something that has been a large part of their value proposition communicated to customers since day 1. I don’t think that should be taken away from users who want it, because those who want an open system already have that option, and as you point out those users would have “no big problem” adjusting to Android.

 

[MilaM]

Imagine two food halls that host independent chefs inside their walls, and let you walk to the competitor next door for free. One lets anyone who wants to cook and sell food, the other won’t let chefs sell food unless the food hall is able to ensure basic food safety and hygiene standards are followed.

How about introducing and enforcing food safety standards for ALL restaurants then? Or do you prefer to let the market sort this out as well?

I think we have exchanged enough analogies. On to the next article on MacRumors.

 

[AppliedMicro]

Can Apple prevent developers from selling apps on Android?

Yes, of course, they absolutely can.
They have the market power to do it.

They can simply include a term in their App Store terms:
„Sorry, can‘t sell a similarly-named (or looking) on other mobile software application stores - or we pull it from ours“.

„Nice successful app you‘re having there on our iOS App Store.
Wouldn’t it be a shame if anything happened to it?“

👉 That‘s the world you‘re advocating for, with your „my platform, my IP, my rules“ stance.

Now, faced with regulation, they wouldn’t call it enforcing exclusivity. They‘d frame it as a security measure, and justify it by reducing confusion for less tech-savvy users:

„Oh, but other platforms/stores can’t guarantee the same privacy and app security as our own App Store does.
Can‘t risk users being tricked into downloading and installing similar (but less secure) apps as can be bought from our own, well-renowned secure store. Cause they may be less secure and expose users to risks. Any security vulnerabilities becoming known might also tarnish the reputation of the iOS app - and thus by extension our own store*. But we‘re just doing it out of concern for our users and their privacy and safety. Great pinky swear. Protect grandma and think about all about the children!”

(why tarnish the reputation of Apple’s own store? Well, users “confusing” stores or installation sources was your argument against having to allow alternative stores, wasn’t it?)

I guarantee you, any developer that’s making more on iOS than they do/would on Android would think twice. It would prevent many from successfully expanding their existing iOS app or brand to Android or other stores. And increase brand loyalty to iOS and Apple, if users can’t get the “same” apps they’re used to on Android.

Even more so if they include „anti-circumvention“ clauses in their terms. Though it wouldn’t even require that. Why, if you’re Apple, mot just drop the pretence and handle it “discretionarily”. Just, you know, give certain developers „a call“ to stop or refrain from selling on Android.

👉 In a world without (enforcement of) competition law, Apple absolutely can quite effectively prevent developers from selling apps on Android.

Would that be anticompetitive? Probably. It might not even require specific law, but could possibly be dealt with old-school pre-DMA style competition law and regulation.

And yet, again, that’s the world you’re advocating for, by advocating for allowing core platform service operators to do as they please. (I mean… you certainly would agree that access to Apple’s platform and store should be entirely up to Apple’s discretion, wouldn’t you? No government should be able to tell them, right?).

I’d argue the EU model also puts downward pressure on innovation and ironically limits real choice in favor of choices that are akin to “coke vs pepsi vs rc cola” - three “different” options that, at the end of the day, are really the same thing.

It just doesn’t add up when you look at streaming services or payment services.

When you’re leveraging unfair advantages from CPS to prop up your own mediocre music streaming service - and restrict the competition from communicating/marketing/selling to users and/or impose a tax (commission) on competition, that doesn’t increase “real choice”. And it doesn’t foster innovation - quite the contrary.

Same is true for Apple Pay.

McDonalds can certainly prevent other restaurants from using their property to sell burgers or fries.

When 98% of the population are eating all of their daily food at (a duopoly of)either McDonald‘s or Burger King…
…can McDonald‘s prevent meat producers from selling their meat to/through other restaurants or distribution channels?

 

[I7guy]

[…{

👉 In a world without (enforcement of) competition law, Apple absolutely can quite effectively prevent developers from selling apps on Android.

[…{

Strawman. To prevent a hypothetical situation throw the baby out with the bath water. There already are laws on the books dealing with corporate strong-arming.

 

[AppliedMicro]

Strawman

It‘s about as much a strawman as denying that software developers face a de facto duopoly of distribution for their apps and in-app purchases - with those two duopoly operators having (basically) mutually exclusive, non-overlapping customer bases.

(this is, as can‘t be stated often enough when replying to you, different from the market for hardware devices. And Apple‘s market share of the latter. Their market share for hardware isn’t much relevant, when they command more than half of the market for apps and in-app purchases)

There already are laws on the books dealing with corporate strong-arming.

…with the DMA being one of those laws.

And neither your nor surferfb‘s arguments and reasoning apply only to the DMA.
They just as well pertain to (oppose) more „traditional“ competition law.

 

[I7guy]

It‘s about as much a strawman as denying that software developers face a de facto duopoly of distribution for their apps and in-app purchases - with those two duopoly operators having (basically) mutually exclusive, non-overlapping customer bases.

There are other app stores, other ways to distribute products and services. For example the web. There are two arguments surround app stores 1) intellectual 2) new laws.

So yeah there is no intellectual argument that I will agree with for governments playing Robin Hood.

(this is, as can‘t be stated often enough when replying to you, different from the market for hardware devices)


…with the DMA being one of those laws.

And neither your nor surferfb‘s arguments and reasoning apply only to the DMA.
They’re just as well opposed to more traditional competition law.

Yep an analogy to the DMA is attempting to cure bad garlic breath with onions. Lipstick on a pig as it were.

 

[surferfb]

Yes, of course, they absolutely can.
They have the market power to do it.

They can simply include a term in their App Store terms:
„Sorry, can‘t sell a similarly-named (or looking) on other mobile software application stores - or we pull it from ours“.

„Nice successful app you‘re having there on our iOS App Store.
Wouldn’t it be a shame if anything happened to it?“

👉 That‘s the world you‘re advocating for, with your „my platform, my IP, my rules“ stance.

Now, faced with regulation, they wouldn’t call it enforcing exclusivity. They‘d frame it as a security measure, and justify it by reducing confusion for less tech-savvy users:

„Oh, but other platforms/stores can’t guarantee the same privacy and app security as our own App Store does.
Can‘t risk users being tricked into downloading and installing similar (but less secure) apps as can be bought from our own, well-renowned secure store. Cause they may be less secure and expose users to risks. Any security vulnerabilities becoming known might also tarnish the reputation of the iOS app - and thus by extension our own store*. But we‘re just doing it out of concern for our users and their privacy and safety. Great pinky swear. Protect grandma and think about all about the children!”

(why tarnish the reputation of Apple’s own store? Well, users “confusing” stores or installation sources was your argument against having to allow alternative stores, wasn’t it?)

I guarantee you, any developer that’s making more on iOS than they do/would on Android would think twice. It would prevent many from successfully expanding their existing iOS app or brand to Android or other stores. And increase brand loyalty to iOS and Apple, if users can’t get the “same” apps they’re used to on Android.

Even more so if they include „anti-circumvention“ clauses in their terms. Though it wouldn’t even require that. Why, if you’re Apple, mot just drop the pretence and handle it “discretionarily”. Just, you know, give certain developers „a call“ to stop or refrain from selling on Android.

In the strawman of a universe where that is a thing Apple is doing and current antitrust law doesn’t prohibit it, then I would support regulation curtailing Apple from being able to do that.

👉 In a world without (enforcement of) competition law, Apple absolutely can quite effectively prevent developers from selling apps on Android.

Would that be anticompetitive? Probably. It might not even require specific law, but could possibly be dealt with old-school pre-DMA style competition law and regulation.

It definitely could. Leveraging dominance in one market (the iOS App Store) to dictate conduct in a separate one (Android distribution) is textbook violation of antitrust principles and would be perfectly capable of being handled without the DMA. Appreciate you making my point for me.

And yet, again, that’s the world you’re advocating for, by advocating for allowing core platform service operators to do as they please. (I mean… you certainly would agree that access to Apple’s platform and store should be entirely up to Apple’s discretion, wouldn’t you? No government should be able to tell them, right?).

“Apple should get broad latitude over their own store and how their own property is used” and “Apple can’t weaponize that store and property to extort developers out of competing market that uses none of Apple’s property” are fully compatible.

If we want to get philosophical about it, my real issue is not regulation versus no regulation. It’s ex-post antitrust that is used on demonstrable abuse (which I think is warranted) versus the DMA’s ex-ante rules that apply across the board whether or not any leveraging or harm is ever shown (outside of a report begging the question that the behavior is bad without anything to back it up so much so that the EU itself rejected it the first time EC proposed it). Particularly where the behavior in question is, in actuality better for consumers). That is bad and wrong and shouldn’t be done - especially when the regulators in questions couple that with absurd “Apple has to give access to its innovations to anyone who wants” style interference in the free market that would make Marx smile.

It just doesn’t add up when you look at streaming services or payment services.

When you’re leveraging unfair advantages from CPS to prop up your own mediocre music streaming service - and restrict the competition from communicating/marketing/selling to users and/or impose a tax (commission) on competition, that doesn’t increase “real choice”. And it doesn’t foster innovation - quite the contrary.

Same is true for Apple Pay.

I’m not going to relitigate the Spotify line item by item. You think the anti-steering rule was bad and the Commission fined it; I disagree but fine. But notice what fined it: Article 102, ordinary abuse-of-dominance law. Same with Apple Pay’s NFC access, opened under Article 102 commitments - I disagree but fine.

You keep reaching for examples that classic competition law already caught, which is my whole point. None of that is an argument for the DMA’s blanket ex-ante rules. If anything it’s an argument for my position that the DMA was unnecessary.

 

[AppliedMicro]

There are other app stores, other ways to distribute products and services

…which have negligible market share.
Why? Because Apple doesn’t allow them.

For example the web

Which Apple - a company commanding about half of the market for mobile apps and in-app purchases and access to the relevant end users - was unwilling to allow before the DMA. Thank you for making the argument for me (and that regulation).

Leveraging dominance in one market (the iOS App Store) to dictate conduct in a separate one (Android distribution) is textbook violation of antitrust principles and would be perfectly capable of being handled without the DMA. Appreciate you making my point for me.

So is hardware devices (including their shared operating system) a related but separate market from app distribution and content subscriptions.

Curtailing Apple’s ability to leverage dominance on one market (hardware) to dictate conduct in another (app distribution/licensing) - and, yet again, their monopoly in distributing iOS apps to dictate conduct in selling and marketing digital content purchases or subscriptions evidently required the DMA.

Appreciate you making my point for me. Music subscriptions, virtual in-app weapons etc. aren‘t the same market as hardware or operating systems.

when the regulators in questions couple that with absurd “Apple has to give access to its innovations to anyone who wants” style interference

They do not.
They just require them to provide similar access to the same functionality as Apple leverages themselves for additional services or devices - in other, separate markets, that is (headphones/earphones, music streaming, etc).

 

[I7guy]

…which have negligible market share.
Why? Because Apple doesn’t allow them.

The intellectual argument is allle doesn’t have to allow them. It’s nonsense about being anticompetitive. Apple can’t prevent android app stores either.

Which Apple - a company commanding about half of the market for mobile apps and in-app purchases and access to the relevant end users - was unwilling to allow before the DMA. Thank you for making the argument for me (and that regulation).

The DMA, that lipstick on a pig, is playing Robin Hood. Fast and loose with someone else’s talent.

So is hardware devices (including their shared operating system) a related but separate market from app distribution and content subscriptions.

Curtailing Apple’s ability to leverage dominance on one market (hardware) to dictate conduct in another (app distribution/licensing) - and, yet again, their monopoly in distributing iOS apps to dictate conduct in selling and marketing digital content purchases or subscriptions evidently required the DMA.

Appreciate you making my point for me. Music subscriptions, virtual in-app weapons etc. aren‘t the same market as hardware or operating systems.

 

[surferfb]

So is hardware devices (including their shared operating system) a related but separate market from app distribution and content subscriptions.

Curtailing Apple’s ability to leverage dominance on one market (hardware) to dictate conduct in another (app distribution/licensing) - and, yet again, their monopoly in distributing iOS apps to dictate conduct in selling and marketing digital content purchases or subscriptions evidently required the DMA.

Appreciate you making my point for me. Music subscriptions, virtual in-app weapons etc. aren‘t the same market as hardware or operating systems.

We’ve gone back on forth on this point enough times that I’ll just say a meaningful chunk of iOS’s value to users is the curated, single-store model, and that’s a legitimate thing for a firm to offer in a market where Android exists as the open alternative. No amount of the EU doing the equivalent of forcing Wal-Mart to carry Target’s house brand for free because Target deserves access to Wal-Marts customers will change that.

They do not.
They just require them to provide similar access to the same functionality as Apple leverages themselves for additional services or devices - in other, separate markets, that is (headphones/earphones, music streaming, etc).

That is exactly what I described. Giving away Apple’s innovations to competitors for free. Marx would be proud!

I’m not shocked that the EU hasn’t decided what’s good for the goose is good for the gander and force Spotify to provide third parties access to its recommendation algorithm for free. Because it’s an absurd overreach the EU should be embarrassed for passing into law. Which is also why you’ll be getting watered-down versions iOS and Android until your regulators come to their senses.

 

[Samplasion]

I’m not shocked that the EU hasn’t decided what’s good for the goose is good for the gander and force Spotify to provide third parties access to its recommendation algorithm for free

Because they haven't asked Apple to release Siri AI's source code either.

a market where Android exists as the open alternative.

On that note, I hope you support the Keep Android Open initiative as strongly as you support Apple's walled garden...

 

[surferfb]

Because they haven't asked Apple to release Siri AI's source code either.

They require Apple to give access to things Apple uses to differentiate its products to Apple’s competitors for free. I don’t see a difference with forcing Spotify to give access to the algorithm.

On that note, I hope you support the Keep Android Open initiative as strongly as you support Apple's walled garden...

Requiring developers to register with Google is a sensible safety measure that does not “close” Android in the least, especially because they allow unverified apps to still be installed.

 

[Samplasion]

They require Apple to give access to things Apple uses to differentiate its products to Apple’s competitors for free. I don’t see a difference with forcing Spotify to give access to the algorithm.

It's the same thing only if you abstract it to such a level that nothing makes sense anymore. To make my point clearer, I'll draw the equivalence in Apple's case:

Apple should be forced to give OpenAI, Anthropic and all AI companies access to their weight models

(since the product is Siri AI). But, as it stands, the equivalence is too far out to be useful in any meaningful way other than rhetoric arguments.

Requiring developers to register with Google is a sensible safety measure that does not “close” Android in the least, especially because they allow unverified apps to still be installed.

If that's considered open, then what Apple did with third-party stores the first time around, when they were so limited it made no sense to use them, is still closed. But according to this forum, that was "turning iOS into android"

 

[surferfb]

It's the same thing only if you abstract it to such a level that nothing makes sense anymore. To make my point clearer, I'll draw the equivalence in Apple's case:

(since the product is Siri AI). But, as it stands, the equivalence is too far out to be useful in any meaningful way other than rhetoric arguments.

The point is the EU forces Apple to take one of they key features Apple uses to differentiate its products (“they work better together”) and give that away to competitors. I think that’s wrong and will result in worse products for everyone.

If that's considered open, then what Apple did with third-party stores the first time around, when they were so limited it made no sense to use them, is still closed. But according to this forum, that was "turning iOS into android"

Can you or can you not install software from an unregistered developer after Google’s change goes into effect? The answer is yes. So it’s open.

The fact that Google is putting some entirely sensible guardrails around how easy it is to install software from unverified sources given the massive malware problem on the Android side doesn’t change the fact that if you want to you can install software from anywhere you still can. Developers can register, and things will work exactly as they have before, or they don’t, and then there is a workaround that allows those who know what they’re doing to install unverified software and prevents spammers from socially engineering users who don’t know what they’re doing from installing unverified software they don’t mean to.

F-Droid are like the people who were outraged when governments mandated seatbelts; just because you think you can do something safely without guardrails doesn’t mean that is safe for everyone (or you), and it’s entirely appropriate to make that safer for everyone even if it annoys a small minority.